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Saturday, June 22, 2024

Ryan Salame, Part of ‘Inner Circle’ at Collapsed Crypto Exchange FTX, Sentenced to Prison

'It was me first. I’m getting in the lifeboat first. To heck with all those customers...'

(Headline USA) A federal judge on Tuesday sentenced former FTX executive Ryan Salame to more than seven years in prison, the first of the lieutenants of failed cryptocurrency mogul Sam Bankman-Fried to receive jail time for their roles in the 2022 collapse of the cryptocurrency exchange.

Salame, 30, was a high-ranking executive at FTX for most of the exchange’s existence and, up until its collapse, was the co-CEO of FTX Digital Markets. He pleaded guilty last year to illegally making unlawful U.S. campaign contributions and to operating an unlicensed money-transmitting business.

Along with helping Bankman–Fried hide the holes in FTX’s balance sheet that ultimately led to the exchange’s failure, Salame was used as a conduit for Bankman-Fried to make illegal campaign contributions to help shape U.S. policy on cryptocurrencies.

While Bankman–Fried and FTX funneled nearly $100 million to mostly Democrat candidates and causes, including dark-money organizations, during the 2022 election cycle, Salame notably donated $20 million in contributions to Republican campaigns in his own name.

Ultimately, though, the funds that Salame used for those contributions also came from Bankman–Fried, who is accused of greasing the wheels on both sides of the aisle to hedge himself against the possibility of investigation or accountability.

For a while, at least, the strategy appeared to work, until spooked FTX traders attempted to withdraw their funds as the exchange’s flaws began to show.

Salame’s sentence of 7½ years in prison, plus three years of supervised release, was more than the five to seven years prosecutors had asked radical leftist Judge Lewis A. Kaplan to impose on Salame in their pre-sentencing memo.

While Salame was a high-level executive at FTX, he was not a major part of the government’s case against Bankman–Fried at his trial earlier this year and did not testify against him.

In a bid for leniency, Salame said during the sentencing hearing that he cooperated and even provided documents that aided prosecutors in their cross examination of Bankman–Fried, as well as in his own prosecution.

Kaplan said Salame “knew precisely what he was doing … and the whole idea was to hide it from the world. Astonishing!”

The judge also chastised Salame for pulling $5 million in cryptocurrencies out of FTX as the exchange was failing.

“You tried to withdraw tens of millions more,” Kaplan said. “It was me first. I’m getting in the lifeboat first. To heck with all those customers.”

Salame apologized to FTX customers and his family, saying that he and others had good intentions, though he added: “I fully understand that the means I sought to achieve these goals were illegal.”

Before he was sentenced, Salame gave brief remarks saying he was “beginning my path to redemption.”

“I accept what’s next,” he said.

Three other high-level executives at FTX are awaiting sentencing for their roles in the exchange’s collapse: Caroline Ellison, who was CEO of the FTX hedge fund Alameda Research, Gary Wang, the co-founder of FTX, and Nishad Singh, FTX’s head of engineering.

All three cooperated with prosecutors and testified at trial against Bankman–Fried in exchange for potentially suspended prison sentences.

Adapted from reporting by the Associated Press

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